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Foreign trade data is improving spectacularly month on month, and this time even analysts are surprised. The balance showed a surplus of almost EUR 1.4 billion in April compared to last year, a trend that could be a boost for the Hungarian economy as a whole.
In April, exports in euro terms were 8.8% higher, and imports 3.5% lower than in the same period last year. The foreign trade balance improved by EUR 1.391 billion to EUR 1.766 billion, according to the first estimate of the Hungarian Central Statistical Office (KSH).
This is definitely a positive surprise, as the pick-up in consumption would result in a larger increase in imports, Gábor Regős, chief economist at Granit Fund Management, told Világgazdaság. The expert stressed that the favorable balance is necessary, as the forint has weakened substantially against the euro in recent days. The favorable trade balance and the resulting current account balance could support the forint.
Indeed, the forint did strengthen slightly on the back of the data.
The balance of foreign trade in goods. Source: KSH
The favorable balance is due to an 8.8% expansion in the euro value of exports. On the basis of previous price indices, the volume of exports could expand by 13-14% on an annual basis, while imports by 8-9%. This is partly due to the fact that there were three more working days in April this year than a year earlier, but this alone may have been insufficient to account for such a large expansion.
The unfavorable industrial production in the previous month may have also played a role, but this seems to have been at least partly made up for in April. The exact value of this will be revealed in Friday’s data release. However, it remains to be seen to what extent this will be a sustained process or just a one-off, month-to-month fluctuation.
Hopefully, the positive trend will continue in the coming months – this is important for the exchange rate,”
the analyst pointed out.
Change in the value of foreign trade in goods (compared to the same month of the previous year). Source: KSH
The improvement of the balance by nearly EUR 1.4 billion compared to last year April was driven by a nearly 9% increase in exports and a 3.5% decline in the value of imports, wrote Dániel Molnár, senior macroeconomic analyst at the Makronóm Institute.
According to the expert, this export data already foreshadows that more favorable figures for industrial performance may come on Friday.
“In the case of exports, the weakness of the German economy and its spill-over into the Hungarian industry continues to play a role in the subdued performance. Our main external market is already showing signs of recovery, as measured by German business activity indices, but this is expected to be slow,” he explained.
Via Világgazdaság, Featured image: Pixabay